Explosion of Solar is Scaring Big Utilities

Solar Scaring Big Utilities

by James Allen

The explosion of solar is scaring big utilities like PG&E, and they are organizing to try to undermine distributed solar energy. However, California recently passed AB 327 to preserve Net Energy Metering (NEM) for all CA solar customers. This is great news for anyone with a solar system because the law locks-in the current NEM rate structure, which has high payback values for solar. In short, anyone with a solar PV system preserves his or her investment for the next 25+ years.

The bigger story is that PG&E is scared of solar. While solar still represents only of a fraction of CA’s energy portfolio, the utilities can see that solar will be the dominant energy source in the future. Why does this scare them? Because solar energy is “distributed” energy, with thousands and thousands of buildings generating their own power. Utilities like PG&E will eventually be relegated to a “grid maintenance” market, which will mean less revenues and lower dividends for shareholders.